7 Tips for Making Cores Profitable

10/14/2017

A core is a part that can be recycled, or has been remanufactured for future sales. Returning old parts may seem to benefit your customer more than you, but with good core control methodology and firm discipline, you can use cores to increase profits for your business.

1.

Establish “cores only” A/P accounts.

A “cores only” account makes it easier to monitor your cores business and know what may be
owed on unreturned cores

2.

Price cores to make a profit.

By marking up cores to the same profit level as other items in a product line, you can earn a
profit on cores that are never returned.

3.

Never issue a core credit until you actually receive the core .

Run your core business like the rest of your business. Cores should be charged when the
repair/exchange item is billed and credited only when the core is actually returned.

4.

Track inventory of “dirty” (returned) cores.

By tracking cores, you will be able to easily assess if your core business is profitable. Without
specific tracking, there is no way to tell if you have problems in core management.

5.

Track cores to customers using the same rules as your suppliers.

Each supplier has different rules for cores, and you should follow those same rules in your
business. This ensures continuity between your customers and your suppliers.

6.

Have a clear policy to not accept cores returns that were not originally purchased from your business.

You will likely not be able to return over-return cores and will end up losing money if you do
not have this policy in place.

7.

Never over-return cores to your suppliers.

Most suppliers will not give credit for over-returned cores. However, keeping them in your
inventory gives you the option to sell them to a broker or returning them to another supplier.

When handled properly, cores can be an asset to your business. By establishing and enforcing good control methods, you can increase profitability on cores and help move your business forward.

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